FNSTPB402 Establish and Maintain Payroll Systems …...This course has been designed for users of the MYOB products AccountRight Plus version 2017.1. Mac users will need to install

FNSTPB402

Establish and Maintain Payroll Systems User Guide

ISBN Number: 978-1-925782-92-9

Part Number: 402

Version: V18.5 2017

AUTHOR – Kerryn Maguire Kerryn has been working with accounting software products for over twenty years. Originally working from 1994 as an accountant with small business when accounting software became mainstream. Kerryn then focused on providing consulting and training services to small business in particular. Expanding from this into to providing curriculum based resources to TAFE and private RTOs. From this she established Microstar Publishing and more recently incorporated OfficeLink Learning to provide a wide range of resources for the Accounting and Business Services Certificate courses. Kerryn has a long association with many TAFEs and RTOs across Australia. Kerryn’s fundamental aim is to provide resources that are easy to understand while providing a practical application of skills acquired. Kerryn also co-authors two titles for Cambridge University Press which are in their 4th Edition – first published in 2000. Kerryn has considerable experience and knowledge:

Bachelor of Applied Science Mathematics Diploma of Education Graduate Diploma of Accounting CRI: Criterion Referenced Instruction Member of Institute of Certified Bookkeepers Member of VELG

Reproduction and Communication for educational purposes The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10% of the pages of this publication, whichever is greater, to be reproduced and/or communicated by any educational institution for its educational purposes provided that the educational institution (or the body that administers it) has given remuneration notice to the Copyright Agency Limited (CAL) under the Act. For details of the CAL license for educational institutions contact:

Copyright Agency Limited Level 15 233 Castlereagh Street Sydney NSW 2000 Telephone: (02) 9394 7600 Facsimile: (02) 9394 7601 Email: [email protected]

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All Rights Reserved

© Copyright 2018 OfficeLink Learning Version 18.5. 2017

This user guide is based on the FNSBKG405 V2017.1 user guide Version 18.3

No part of the contents of this book may be reproduced or transmitted in any form or by any

means without the written permission of OfficeLink Learning. All registered trademarks, or service

marks of their respective owners.

While care has been taken in the preparation of this Training Tool, OfficeLink Learning, the

developer does not accept any liability for any damage or loss (including indirect and consequential

loss) incurred by any person because of relying on the information contained in this material. This

tool should not be regarded as professional advice and it should not be relied upon in any

important matter without obtaining appropriate advice relevant to your situation.

It is the Registered Training Organisation’s responsibility to validate the mapping of this tool to the

performance criteria.

Trademarks and Acknowledgements

All terms or products mentioned in this manual that are known to be trademarks have been

acknowledged. OfficeLink Learning cannot attest to the accuracy of this information. Use of a term

in this manual should not be regarded as affecting the validity of any trademark.

Marian Brown’s content has contributed to this text.

Software Description

This course has been designed for users of the MYOB products AccountRight Plus™ version 2017.1.

Mac users will need to install and use ‘Parallels’ or similar software, i.e. an emulator installed to

allow the Mac to run PC programs.

The case study in this material uses fictional information.

Accredited MYOB Publisher

OfficeLink Learning has been accredited by MYOB as a Publishing Partner. We have met the

selection criteria to hold this status.

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Contents

© Copyright 2018 OfficeLink Learning i

Contents Unit 1 - Introduction ........................................................ 1

Purpose of this User Guide .................................................... 1

Prerequisites ....................................................................... 1

Relationship to Competency Standards ................................... 2

Organisation of this User Guide .............................................. 2

What you will need ............................................................... 3

Conventions used in this User Guide ....................................... 4

Symbols used in this User Guide ............................................ 5

Installing AccountRight 2017.1 on a Windows PC ..................... 6

Download Exercise Files ........................................................ 8

To use Exercise Files .......................................................... 11

Back up and Restore .......................................................... 12

Unit 2 Payroll legislation and requirements .................... 15

Overview .......................................................................... 15

Fair Work .......................................................................... 16

Fair Work Act 2009 ............................................................ 18

New Employment Agreements (after March 2008) ................. 22

National Employment Standards (NES) ................................. 23

Award modernisation .......................................................... 26

Bookkeepers Code of Conduct ............................................. 26

Payroll tax ........................................................................ 27

Rights and obligations of an employee .................................. 27

Employee information ......................................................... 29

Tax File Numbers ............................................................... 29

Why do you need a TFN? .................................................... 30

Completing a Tax File Number Declaration - Employer ............ 32

Employer obligations .......................................................... 32

Summary of employer obligations covered in this unit ............ 39

Occupational Health and Safety ........................................... 40

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Contents

ii © Copyright 2018 OfficeLink Learning

Review of Payroll Legislation 1 ............................................. 41

Review of Payroll Legislation 2 ............................................. 44

Research – Employee Agreements ........................................ 45

PAYG Withholding .............................................................. 49

Paid Parental Leave ............................................................ 51

Eligibility to work in Australia ............................................... 52

Superannuation eligibility .................................................... 52

SuperStream ..................................................................... 53

Salary sacrifice .................................................................. 54

Reportable Employer Superannuation Contribution (RESC) ...... 56

Long Service Leave ............................................................ 57

Lump sum payments .......................................................... 59

Terminations ..................................................................... 60

Reference sites .................................................................. 63

Unit 3 - Tax Agent Registration and Requirements ......... 65

Learning outcomes ............................................................. 65

Tax Agent Services Legislation ............................................. 66

Registration Requirements .................................................. 68

TASA Knowledge ................................................................ 70

Unit 4 - Exploring the Payroll Command Centre .............. 77

Learning outcomes ............................................................. 77

About Best Consultants Pty Ltd ............................................ 78

Before you begin exploring the Payroll Command Centre ........ 78

Exploring the Payroll Command Centre ................................. 78

Checking the Payroll year on your company file ..................... 81

Checking your business details ............................................ 82

Employment rules .............................................................. 83

Employee details ................................................................ 85

Wages Accounts in the Accounts List .................................... 86

Exploring Payroll Categories ................................................ 88

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Contents

© Copyright 2018 OfficeLink Learning iii

Exploring Payroll Categories - Wages .................................... 88

Exploring Payroll Categories - Superannuation ....................... 94

Exploring Payroll Categories - Entitlements ........................... 98

Exploring Payroll Categories - Deductions ........................... 103

Exploring Payroll Categories - Taxes ................................... 105

Creating and editing Employment Classifications .................. 106

Check and Modify the Employee card file for Lorry Watts ...... 107

Payroll Linked Accounts .................................................... 115

Unit 5 - Processing Payroll ............................................ 121

Learning outcomes ........................................................... 121

Payroll Procedures – Best Consultants Pty Ltd ..................... 122

Processing pays using Cash ............................................... 125

Checking the accuracy of Lorry’s pay before recording .......... 131

Payroll verification............................................................ 133

Recording pays ................................................................ 134

Preparing the cheque for payroll ........................................ 137

Notes on correction of paycheque errors ............................. 140

Viewing payroll figures in your Profit and Loss ..................... 141

Viewing payroll figures in your Balance Sheet ...................... 142

Processing pays – using Cheques ....................................... 143

Setting up Electronic Payments account .............................. 150

Entering Banking Details for each Employee ........................ 152

Timesheets for Ann Wilson and Amber Jones ...................... 154

Processing Pays – using electronic payments ....................... 155

Preparing the Electronic Payment file .................................. 158

Processing Pays – next period ........................................... 160

Viewing your Electronic Payments Account .......................... 164

End of Month Payroll Reports ............................................. 165

Reconciling your Gross Wages and Superannuation .............. 168

Reconciling your PAYG Withholding .................................... 171

Correcting Entitlement errors ............................................ 173

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Contents

iv © Copyright 2018 OfficeLink Learning

Unit 6 – Payment of Deductions Withheld ..................... 175


Activity: Deposit funds into a cheque account ...................... 176

Entering the payment of superannuation by cheque ............ 179

Superannuation Guarantee – a guide for employers ............. 181

Notes on Payment of PAYG Withholding Taxes ..................... 182

Completing the PAYG Withholding Fields on the BAS ............. 183

Payment of Business Activity Statement ............................. 188

Payment of Donation to the Cancer Appeal .......................... 189

Unit 7 - End of Payroll Year Procedures ........................ 193


Notes on Payment Summaries ........................................... 194

Starting a New Payroll Year ............................................... 206

Unit 8 - Processing pays and handling enquiries ........... 209


About Carol Pty Ltd .......................................................... 210

Payroll exercise ................................................................ 210

Unit 9 - Timesheets ...................................................... 229


Keeping time and wage records ......................................... 230

Calculating hours worked .................................................. 230

Create a new card for John Williams ................................... 232

Entering timesheet information and processing a pay ........... 236

Processing pays using timesheets ...................................... 240

Display timesheet reports ................................................. 243

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Contents

© Copyright 2018 OfficeLink Learning v

Unit 10 - Other payroll issues ....................................... 245


Setting up Salary Sacrifice ................................................ 246

Processing a pay with Salary Sacrifice ................................ 248

Paying Salary Sacrifice ..................................................... 250

Reporting wages on the Business Activity Statement ............ 251

Long Service Leave accrual ............................................... 251

Calculating a Termination payment .................................... 255

Entering a Termination payment ........................................ 259

Calculating Payroll Tax ...................................................... 261

Payroll Tax reports ........................................................... 263

Unit 11 - Payroll exercise .............................................. 267


Payroll details .................................................................. 268

Record keeping Requirements ........................................... 268

Setting up your company file ............................................. 280

Protecting payroll data ...................................................... 281

Collecting and filing Payroll data for Casey Fields ................. 282

Create Payroll categories in the AccountRight company file ... 284

Entering employee information in AccountRight ................... 285

Handling enquiries from employees .................................... 286

Calculating hours worked .................................................. 288

Processing weekly pays for 1st week .................................. 290

Calculating hours worked for 2nd week ............................... 291

Processing weekly pays for 2nd week ................................. 292

Process End Month payments ............................................ 293

End of Year checklist ........................................................ 295

Reconciling Payment Summaries ........................................ 296

End of Payroll Year ........................................................... 297

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Contents

vi © Copyright 2018 OfficeLink Learning

Appendix A - Elements of Competency and

Performance Criteria .............................. 299

Appendix B - Solutions to exercises .............................. 301

Appendix C - Forms ...................................................... 357

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Unit 4 - Exploring the Payroll Command Centre

© Copyright 2018 OfficeLink Learning 77

Unit 4

Exploring the Payroll

Command Centre

Learning outcomes

On completion of this unit, you will be able to:

open an AccountRight payroll file

find payroll categories, entitlements, tax and superannuation set up in the file

find cards set up for employees

make changes to employee cards and payroll categories

check payroll linked accounts in the General Ledger.

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78 © Copyright 2018 OfficeLink Learning

About Best Consultants Pty Ltd

In this user guide, you will be processing the pays for employees of Best Consultants Pty Ltd, a private company with Roger Cooper as the manager. The business is supported by three staff.

Before you begin exploring the Payroll Command Centre Before exploring the Payroll Command Centre, make sure you have a copy of the following file on your computer – see page 6.

Best Consultants v2017 2018.myox

Return to your desktop.

Exploring the Payroll Command Centre 1. Open MYOB AccountRight v2017.1 Student Edition by

double-clicking on the MYOB shortcut on your desktop.

The following window is displayed.

2. Click on Open a company file.

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3. Locate the AccountRight company file Best Consultants v2017 2018.myox found in C:\Documents\MYOB\My AccountRight Files\TPB402 or the location you have copied the file to.

4. Select Best Consultants v2017 2018.myox then Open

5. Sign on as Administrator and leave the Password blank

6. Click OK.

FNSTPB402

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Checking the Payroll year on your company file Before processing any paycheques, you will check if the company file you are using is using the current payroll data.

1. Select Setup in the Menu Bar

2. Select Load Payroll Tax Tables.

3. Select Load Tax Tables.

4. Select Setup in the Menu Bar again and choose General Payroll Information.

Your window should look like this.

5. Note the date of the CURRENT PAYROLL YEAR it is

greyed out, but it is 2018.

6. Note the Tax Table Revision Date – in this book it is 1/07/2017 – if yours is later or earlier the results will be slightly different even though the process is the same

7. Click on OK to return to the Command Centre.

You could add a value of cents to round to if you are paying in cash. Leave it set to 0 for this example.

Tax Table Revision Date

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Checking your business details

So that your printouts can be identified in the classroom, you will now enter your details. To enter your name:

1. Select Setup in the Menu Bar.

2. Select Company Information.

3. Click into the Address box

4. Type in your name Your Name and press ENTER

5. Type in any address and press TAB.

In this window, also check the Current Financial Year (different from the Payroll Year above). It should also be 2018. This is the year used to print financial reports.

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Employment rules

All employees of Best Consultants Pty Ltd are working under the Clerks – Private Sector Award 2010.

@ Go to www.fairwork.gov.au, select ‘Awards and agreements’ and then ‘Awards’. Go to the ‘List of awards’ and find and download a copy of the Clerks – Private Sector Award 2010.

Please note this exercise is based on the version including amendments up to 21 June 2017.

When you are processing payroll, you must have a copy of the relevant award or agreement on hand.

Below and overleaf are extracts from the Clerks – Private Sector Award 2010.for you to read through, just to give you an idea of how award look.

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http://www.fairwork.gov.au/



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Employee details

Set out below are details of the four employees of Best Consultants

Pty Ltd.

Roger Cooper Business Manager Paid a Salary of $50,000 per year Roger has a HELP debt No overtime Paid Holiday, Personal Leave and LSL Asgard Super Fund Contributes $2 per pay to the Social Club Makes a $2 donation to the Cancer Appeal

Ann Wilson Receptionist Full-time employee - 38-hour week Classification: Level 2 - Year 1 Pay rate: $21.29 per hour ($809.10 per week) Paid overtime rates, meal allowance, shift allowance Entitled to holiday and personal leave plus LSL Sunsuper Fund Contributes $2 per pay to the Social Club Makes a $2 donation to the Cancer Appeal

Lorry Watts Bookkeeper Full-time employee - 38-hour week Classification: Level 3 Pay rate: $22.49 per hour ($854.60 per week) Paid overtime rates, meal allowance, shift allowance Paid car allowance for km clocked does banking, postage, etc. Entitled to holiday and personal leave plus LSL Sunsuper Fund Contributes $2 per pay to the Social Club Makes a $2 donation to the Cancer Appeal

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Amber Jones Casual employee (usually 10 hours) Classification: Level 1 – Year 1 Pay rate: $24.30 per hour ($738.80 per week = $19.44 plus 25% loading) Amber is not paid any allowances Amber is not entitled to holiday or personal leave Amber is entitled to LSL Sunsuper Fund This is Amber’s 2nd job – so cannot claim Tax Free Threshold Makes a $2 donation to the Cancer Appeal

Wages Accounts in the Accounts List

The Accounts List (also known as Chart of Accounts) must provide appropriate accounts for wages:

• Expense Accounts - to record wages • Liability Accounts - to record deductions payable to the

Taxation Department, Superannuation Fund, Unions etc. • Bank Accounts - to track money paid for wages.

This company file already has employees and appropriate accounts set up.

1. Select the Accounts Command Centre.

2. Select Accounts List.

3. Click on the Expense tab.

Wages for Management and Wages for the Office are being tracked. Allowances (Car and Meal) are being tracked in separate accounts.

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4. Click on the Liability tab.

The following Liability Accounts have been created for wages. These accounts are for amounts still retained (from wages) by the business that are still owed e.g. PAYG tax to the ATO

Your Accounts List must also provide for a Bank Account from which wages are drawn.

5. Click on the Asset tab.

Your wages can be drawn from the following Bank Accounts.

6. Click on Close or press ESC to return to the Command Centre.

Accounts have been created to track the following: - PAYG Payable (Employee Income Tax) - Superannuation payments - Social Club - Cancer Appeal donations.

Wages can be paid by cheque from the NAB Cheque A/C, paid in cash from Undeposited Funds or a cashed cheque or paid electronically using the Electronic Payments A/C. In this workbook, wages will be paid by cash, cheque and electronic transfer.

Liability

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Payroll Categories

1. Click on Payroll in the Command Centre.

2. Click Payroll Categories.

3. Click on the Wages tab if not already selected.

The following window is displayed. This window displays the different wages employees will be paid.

Payroll Categories - Wages

4. Click on the to the left of Base Hourly.

5. The following window is displayed.

This window displays the formula, i.e. number of hours at the Regular Rate of the employee, e.g. $21 per hour × 1.

6. Click OK to return to Wages.

Base Hourly

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Unit 5 - Processing Payroll


Unit 5

Processing Payroll

Learning outcomes


• check payroll data and timesheets

• process pays for salaried employees

• process pays for employees paid hourly

• process pays – paid by Cash

• process pays – paid by Cheque

• process pays – paid by Electronic Funds Transfer

• print payroll reports

• enter variations to pays – personal leave, holiday,

allowances, following organisational policies and

procedures.

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Payroll Procedures Best Consultants

Preparing payroll within designated timelines

Pay details (timesheets) must be submitted to the

supervisor/relevant payroll person to allow time for checking

prior to processing payroll.

Employees have a set payday; therefore, the person responsible

for payroll must always set aside a time, e.g. Thursday morning

to process pays.

Payroll security

Wages and salaries are a major expense for businesses, and

steps must be taken to ensure that theft or fraud does not occur.

Security measures in this business include:

• Completion of timesheets and use of time clocks is

supervised to ensure each employee completes their

own and no one else’s.

• All payroll documents are kept under lock and key and

only the person responsible for payroll and

management have access to records. Your MYOB

company file must be PASSWORD protected (however,

in this exercise you will not use a password).

• If possible, the person who prepares the payroll should

not be the person who collects or distributes cash

wages to employees.

The cash wages, cheques, ListPay or electronic funds procedure

may require authorisation by the supervisor.

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Payroll files

All payroll documentation should be kept in a locked filing draw

so that personal information is not available to other employees.

The following files should be kept:

• A file for each employee in which to store Tax File

Number Declaration, superannuation forms and

personal information

• A file for payroll reports for each pay run

• A file for each superannuation fund and payment

documentation

• A file for each deduction payable, e.g. Cancer Appeal

donation

• A file for Awards, Agreements, pay rates, etc.

• A file for WorkCover documentation.

Payroll confidentiality

Employees could work under different awards and conditions.

Disclosure of pay details is prohibited. Disclosures can cause

disharmony among employees, especially if some feel that they

are receiving a lower wage than others who they consider to be

working at a decreased capacity.

The bookkeeper must be aware of the contents of the Privacy Act

1988 in relation to the storage and security of personal

information.

@ Go to www.oaic.gov.au and find the page about the Privacy

Act 1988. Save this page in your web browser Favourites

for future reference.

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http://www.oaic.gov.au/



The Notifiable Data Breaches Scheme

From 22 February 2018, the Privacy Amendment (Notifiable Data

Breaches) Act 2017 established the Notifiable Data Breaches (NDB)

scheme. The NDB scheme applies to all agencies and organisations

with existing personal information security obligations under the

Australian Privacy Act 1988.

The NDB scheme introduces an obligation to notify individuals whose

personal information is involved in a data breach that is likely to

result in serious harm. This notification must include recommend-

ations about the steps individuals should take in response to the

breach. The Australian Information Commissioner must also be

notified of eligible data breaches. The OAIC has provided compre-

hensive information about the NDB scheme at

www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-

scheme

Exercise: Recap

In the following exercise you will paying the employees weekly. Best Consultants Pty Ltd employs the following personnel:

Roger Cooper Business Manager Paid a salary of $50,000 per year

Ann Wilson Receptionist Full-time employee (38-hour week)

Lorry Watts Bookkeeper Full-time employee (38-hour week)

Amber Jones Casual employee

Employees are paid weekly (4 pay days this month).

Week 1 By Cash

Week 2 By Cheque

Week 3 Electronic Funds Transfer

Week 4 Electronic Funds Transfer

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https://www.legislation.gov.au/Details/C2017A00012

https://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme

https://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme



Processing pays – 7 March for pay period 1 to 7 March

In this unit, the current month is MARCH.

Wages paid in Cash:

7 March Roger Cooper salary

Amber Jones 10 hours

Lorry Watts 38 hours

Ann Wilson 38 hours

1. Open AccountRight v2017.1 if not already open.

2. Open your company file Best Consultants v2017 2018.myox used in Unit 4.

3. In the Payroll Command Centre, click on Process Payroll.

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The Process Payroll window is displayed.

4. Select the following pay period information.

5. Select Next.

The following window is displayed. Check that the Payment Method is Cash. If not, exit and correct the payment details on the employee card. The pays are calculated using the ‘standard pay’ details.

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Editing the pay for Roger Cooper

1. Click on the to the left of Roger Cooper to display the standard pay details. The following window is displayed.

Explanation: Base Salary = $50,000 divided by 52 weeks = $961.54 Holiday Leave Accrual = 152 divided by 52 = 2.923 Sick Leave Accrual = 76 divided by 52 = 1.462 Asgard Super = 9.5% of $961.54 = $91.35 PAYG Withholding as per PAYG Withholding Table 1/7/17, including Medicare Levy and HECS. Pay is being paid in Cash and taken from Payroll Clearing A/C.

2. Add Roger Cooper to the Memo field so that ‘Roger Cooper’ appears in the Memo the next time you process his pay.

3. Select OK to accept the payroll details.

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Editing the pay for Amber Jones

1. Click on the to the left of Amber Jones to display the standard pay details. The following window is displayed.


Explanation:

Amber is paid the 10 hours worked.

Amber cannot claim the Tax Free Threshold because this is her second job.

Amber is a casual employee and not entitled to sick or holiday entitlements.

Amber’s gross wages have not reached $450 this month; therefore, no super has been calculated. Superannuation will be calculated on monthly wages when $450 is reached.

DO NOT RECORD – turn to the following page.

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Checking the accuracy of Amber’s pay before recording

Let’s check these figures manually to check that the payroll for Amber has been set up correctly.

Complete the pay slip below manually and check your figures against the amounts on your screen.

Paycheque, Amber Jones Gross Wages

Base Hourly - 10 hours @ $24.30 per hour

$

Less Deductions

PAYG Withholding (No Tax-free threshold column – column 4)

$54.00

Cancer Appeal Donation $ $

Net Wage $

2. Add Amber Jones to the Memo field.

3. Select OK to accept the payroll details.

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Editing the pay for Lorry Watts

4. Click on the to the left of Lorry Watts to display the standard pay details. The following window is displayed.

The pay is calculated using the standard pay. You will need to make an adjustment. Lorry worked one afternoon shift, so the business needs to pay her extra for these 8 hours.

According to the award an extra 15% on top of her ordinary rate is payable for an afternoon shift.

8 hours x $22.49 = $179.92 x 15% = $26.99

Add $26.99 to the pay cheque against the Shift Allowance category. Note that this changes the PAYG and super amounts.

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Checking the accuracy of Lorry’s pay before recording

Complete the pay slip below manually and check your figures with AccountRight.

Paycheque, Lorry Watts

Gross Wages

Base Hourly - 38 hours @

$22.49 per hour

$

Shift Allowance $26.99 $

Total Gross Wages $

Less Deductions

Social Club Deduction $

Cancer Appeal Donation $ $

PAYG Withholding

(Tax-free threshold)

$141.00

Net Wage $

Superannuation 9.5% of (Base Hourly + Shift Allowance) $…………….

5. Add Lorry Watts to the Memo.

6. Select OK to change the standard pay details.

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Editing the pay for Ann Wilson

7. Click on the to the left of Ann Wilson to display the pay details.

Ann did not work any shifts this week so there is no need to work out the Shift Allowance.

8. Add Ann Wilson to the Memo field.

9. Recap the transaction. (Select Edit in the Menu Bar, select Recap Transaction.)

Your recap transaction should look like the window shown on the following page.

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This window displays how this paycheque will be allocated to the General Ledger.

10. Select OK twice to return to the Process Payroll window.

Payroll verification

1. Select Preview Pay Details button to view the pay slips to enable you to identify any errors and correct before recording your pays.

The Payroll Verification for Roger Cooper would look like this:

2. Scroll down and check the accuracy of the pays.

The report can be printed and presented to your Workplace Assessor for authorisation before recording.

3. Click on Close to return to the employee’s pay window.

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Recording pays

1. After checking the accuracy of the payroll, select Record.

You will receive a message indicating the number of paycheques recorded successfully.

2. Select OK.

A cheque for the Net Wages will now be written out for $2401.17, taken to the bank and cashed (see overleaf for Cash Analysis Sheet). Wages will then be paid to employees in cash.

3. To record the above cheque, select Spend Money. Sample

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4. Enter the following details - use cheque number 124.

5. Select Record to record the cheque.

6. Select Next.


Pay Slips can be either printed or emailed. We will print the Pay Slips.

7. Select Print or Email Pay Slips.

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PRINTOUT 3 - Pay Slip for Lorry

In this exercise we will print just one pay slip for Lorry Watts.

1. Click the Select box next to Lorry Watts.

2. Select Print to print a copy of the Pay Slip for Lorry.

3. Make your selections in the Print dialog box.

The Payslip will print, and you will be returned to the Process payroll window.

4. Select Finish to return to the Command Centre.

Solution can be found in Appendix B.

Select

Print

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Preparing the cheque for payroll

On page 135, you used Spend Money to record the cheque to take to the bank to cash to pay the wages in cash.

1. You are required to write out the physical cheque printed below. (Please initial beside Pay Cash Only. You have permission to sign the cheque.)

2. You would now be required to complete a Cash Analysis Sheet (an example is shown below) to present to the bank with your cheque to inform the teller what denominations you require so that the correct number of notes and coins can be handed to each employee.

3. To reconcile the cash analysis:

a. Add the number of $50 notes required write it the Number line. b. Multiply the number of notes by the value of the notes, e.g.

15 × $50 and write the answer in Total B line. c. Add up all the amounts in Total B line. They should add up to

the total pay for the week.

Employee Name

$50

$20

$10

$5

$2

$1

50c

20c

10c 5c

Total A

Amber Jones

Ann Wilson

Lorry Watts

Roger Cooper

Number N/A

Total B

NOTE: We chose in our Setup preferences to leave our cent rounding to zero. When you are paying in cash, you may need to round to 5 cents. In this simulated environment, however, you may prefer your cash with your own rounding.

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PRINTOUT 4 - Payroll Advice Report 7 March

The business needs a hard copy of the processed pays to keep on file.

Print a Payroll Advice Report:

1. Select Reports Index to Reports in the Menu bar.

2. Click the Payroll tab.

3. Click on Payroll Advice

4. Click into the Filter Report and enter the dates – in this case 7/03/2018 in the Dated From and the To box

5. Click on Display Report

6. Click on the Menu button at the top left corner of the Report window

7. Select Print and Print to print details of the four pays processed on 7 March.

8. Click on the Close button to close the Report window and return to the Command Centre

Solution can be found in Appendix B.

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PRINTOUT 5 - Payroll Activity [Summary] Report – 7 March

This report is a summary of the four pays and a total of the Gross Wages, Deductions, Tax, Net Wages and Superannuation. These figures will be used later in this workbook to reconcile your payroll.

Print the Payroll Activity [Summary] report:

1. Select Reports Index to Reports in the Menu bar.

2. Click the Payroll tab.

3. Click on Activity Summary

4. Click into the Filter Report and enter the dates – in this case 7/03/2018 in the Dated From and the To box

5. Click on Display Report

6. Click on the Menu button at the top left of the Report window

7. Click on Print then Print again in the Print dialog box.

Your report should look like this.

8. Click on Close to close the Report window and return to the Command Centre.

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Notes on correction of paycheque errors

To correct an incorrect Payroll entry (before cheque was written out or cash paid to employees):

1. In the Payroll Command Centre, select Transaction Journal.

2. Enter an appropriate date range – in this case 1/03/18 to 7/3/18

3. Locate Roger Cooper’s entry in the Payroll tab

4. Click on the zoom arrow to the left of the entry to display the pay.

5. You can correct the Payment Method, Pay Period Start

and Pay Period Ending but NOTHING ELSE -If you need to change anything else you will need to Delete the cheque and start again

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Unit 7 - End of Payroll Year Procedures


Unit 7

End of Payroll Year

Procedures

Learning outcomes


• print payment summaries

• start a new payroll year.

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Notes on Payment Summaries

A PAYMENT SUMMARY must be issued to each worker who has received payments under the PAYG withholding system, even if no tax has been withheld from the earnings. A Payment Summary cannot be issued to a partnership, company or trust.

There are four types of payment summary:

• The Individual Non-Business Payment Summary (covered in this User Guide)

• The Voluntary Agreement Payment Summary • The Labour Hire and Other Specified Payment

Arrangements Payment Summary • ETP Payment Summary.

Before printing your Payment Summaries:

a. Make sure all old employees who have not earned any income for this financial year have:

• a Z in front of the surname (to put them to the bottom of the list)

• been made inactive and changed to Labour Hire (so that they are not included)

• a Termination Date before the start of the financial year you are working in.

b. complete items 1 to 4 of the End of Payroll Year Checklist on the following page. You have completed most of this as you have gone through Unit 6.

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IMPORTANT: Backup your company file

Before starting end-of-year procedures, you should backup your company file.

Name the file ‘Year end 2018’.

PRINTOUT 15 – Payment Summaries for employees

After your payroll has been reconciled for the year on 30 June and you have completed up to checkpoint 5, you can print your Payment Summaries.

Your business will print the Payment Summaries on plain paper. Payment Summaries can also be handwritten.

Payment summaries must be given to employees by 14 July.

1. In the Payroll Command Centre, select Prepare

Payment Summaries.

The MYOB Payment Summary Assistant will be displayed.

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2. Click on Next.

3. Your company details and contact details will be entered on the following screen. (Use the following approved state codes: ACT, NSW, NT, QLD, SA, VIC, TAS, and WA.)

4. Click on Next.

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The Set up the Payment Summary fields window is displayed.

On the left-hand side are listed the fields on the Payment Summary to contain the various totals for Gross Payments, Allowances, Lump Sum Payments, Deductions and Tax.

5. It is now your job to link the Payment Summary fields on the left with the Payroll Categories on the right-hand side of the window.

a. Click on Gross Payments on the left-hand side.

b. Now click on the payroll categories on the right side which are included in Gross Payments like this:

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c. The Car Allowance is NOT INCLUDED in the Gross Payments. This amount will be shown beside Allowance 1.

(Overtime Meal Allowance is not included in W1 but may be shown on the payment summaries.

d. Select Allowance 1 on the left-hand side

e. Type CAR in the Description box

f. On the right-hand side, select Car Allowance. Your window will look like this.

Including this allowance would, if applicable, allow the employee to claim a deduction in his/her tax return. In our example, we have paid an award transport payment which is PAYG exempt anyway.

g. Allowance 2 will need to be set up for Meal Allowance.

Car

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h. Report the Work Place Giving – Cancer Appeal donation like this.

i. Click on Total Tax Withheld and check this box is

linked to PAYG Withholding.

6. Click on Next to view the Reportable Employer

Superannuation contribution screen.

Some superannuation contributions must be reported to the ATO for example RESC. To do this, link the reportable superannuation payroll categories to the assistant in this screen or manually type in the amounts in this screen against the relevant employee. (This is not for the normal 9.5% Superannuation guarantee)

7. Click on Next

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In the next window, you enter Reportable Fringe Benefits.

If an employee’s ‘total fringe benefit amount in the FBT year (1 April to 31 March)’ exceeds $2,000.00, the amount must be ‘grossed-up’ regardless of whether you can or cannot claim a GST credit for the benefits provided. Use the lower gross up rate of 1.8868 for reporting on employees’ payment summaries.

NOTE: In practice if Section 57A applies to your business in practice just tick the box and an extra column is provided for you to enter values.

8. Click on Next.

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9. At this point, you may be asked to enter the addresses or tax file numbers that have not been entered correctly.

10. Review the Payment Summaries by clicking on the

zoom arrow next to the employee’s name – for example click on the zoom arrow for Lorry Watts

11. Check these figures against the Payroll Register

Report (Payroll Register Detail report is better if employees have allowances) for the year to make sure you have not omitted a category.

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Unit 10 - Other payroll issues


Unit 10

Other payroll issues

Learning outcomes


• handle Salary Sacrifice

• account for Long Service Leave

• enter a Termination payment

• set up Payroll Tax.

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Employee

Superannuation Name

Linked Payable

Contribution type

$200 per pay period

Setting up Salary Sacrifice

Remember to refer to Unit 2 for notes on Superannuation and Salary Sacrifice.

John Williams has negotiated a salary sacrifice arrangement now. He will sacrifice $200 a fortnight. Super Guarantee of 9.5% will be calculated on the gross earnings as per arrangement.

1. Ensure you are using the same file that you used in Unit 9.

2. In the Payroll Command Centre, select Payroll Categories.

3. Select the Superannuation tab.

4. Click on the New button

5. Click on the Contribution Type and click on Salary Sacrifice.

6. Click into the Superannuation name and type Salary Sacrifice J Williams

7. Click on the Linked Payable Account droplist button and click on 2-4200 Sunsuper Payable

8. Click on the Equals option and type 200 in the $ amount box:

9. Click on Employee button and select John Williams.

10. Click on OK and Close to return to the Command Centre.

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In this unit, we are not using the Timesheet function, so John’s standard hours need to be checked and set to 76.

11. Click on the Card File and Cards List

12. Click on the zoom arrow for John Williams

13. Click on the Payroll Details tab

14. Click on the Standard Pay option

15. Click into the Hours cell for Base Hourly and type 76.00 then TAB

Your window should look like that shown below.

16. Click on the Superannuation tab – the Salary Sacrifice option should be selected

17. Click on OK to return to the Command Centre.

18. Update the system preferences to remove the preference to use timesheets.

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Processing a pay with Salary Sacrifice

1. Process a pay for John Williams (no timesheets) using the next fortnight date from Unit 9: 13/05/18 to 26/05/18

2. Select the option Process individual employee

3. Click on the Zoom button for John Williams

4. Your paycheque should look like this:

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Explanation:

Wage is $1,759.40 - $200 salary sacrifice.

PAYG Withholding is calculated on the net amount which is $1,559.40.

9.5% superannuation is calculated on gross wages amount of $1,759.40 as per agreement.

Gross Wages shown on the Payment Summary at the end of the financial year would be (referring to the above payment) $1,759.40 - $200 as shown below.

5. Record the paycheque but don’t process the electronic payments file.

6. Return to the Command Centre.

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Paying Salary Sacrifice

At the end of the month, the amount of salary sacrifice must be paid to the Superannuation Fund along with other amounts payable to the same fund.

1. Click on the Pay Liabilities in the Payroll command centre.

2. Click on the Liability Type and click on Superannuation

3. Click in the Dated From box and type 1/05/18

4. Click in the Dated To box and type 31/05/18

5. Select all the amounts to be paid

6. Check the Payment Date for the cheque is 31/05/2018

7. Record the payment.

8. Click on Cancel to return to the Command Centre.

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Reporting wages on the Business Activity Statement

When reporting Wages in W1 on the BAS or IAS Statements, you must remember to exclude Salary Sacrifice in the same manner as on the Payment Summary. MYOB software requires that Salary Sacrifice is selected in this screen. It will then subtract the amount from the total W1.

Long Service Leave accrual Carol Wall is entitled to 0.866 weeks long service leave accrual for each year worked, payable after 7 years. She has been employed for 7 years and 6 months as of 12 May 2018.

Calculation - hours per week to be accrued: 0.866 weeks per year = 38 × 0.866 = 32.9 hours per year

Per pay period: 52

32.9 weeks = 0.63269 × 2 weeks

= 1.265 hours (per fortnightly pay)

Or as a percentage (used for permanent part-time or perhaps long-term casual – refer to Long Service Leave rules for your State/Territory).

Calculation: 38529.32

× × 100 = 1.665% of Gross Hours

Note this is just an example – you will need to seek assistance in the workplace.

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To set up Long Service Leave accrual in AccountRight:

1. In the Payroll Command Centre, select Payroll Categories.

2. Select Entitlements.

3. Click on New to create an entitlement for Long Service Leave.

4. Set up the following for salaried employees. (This could also be used for full-time hourly employees, but not part-time.)

5. Click on the Employee button and click on Carol Wall and OK to attach this entitlement to Carol Wall and ensure the wage category Long Service Leave is linked to Carol.

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Note: The following screen shows the setup that you would use for part-time/casual employees. (Special rules apply for casual employees.)

You will need to exempt all non-based hourly wages.

7. Go to the card for Carol Wall and add the entitlement balance of 247 to her Long Service Leave Accrual field in the Carry Over column. This is the amount only up to 12/5/18. Normally you would need to calculate up to your current month of processing.

8. It has also been identified that Carol is missing 80 hours of Carry Over entitlement of Annual Leave Accrual – Salary so type 80 hours in that row as well

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In this case study, Carol is entitled to LSL after she has worked ten years and the entitlement is calculated from the date of her employment. We have calculated one year’s entitlement to be 32.9 hours, so Carol’s entitlement is 247 hours for the 7 years and 6 months she has served.


10. You now need to process Carol’s pay for the fortnight as below but do not process the electronic payments – just click on Record and Close


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Appendix A - FNSTPB402 Elements of Competency and Performance Criteria


Appendix A

FNSTPB402 Elements of Competency

and Performance Criteria

Element Performance Criteria Reference

1 Establish payroll requirements

1.1 Assess scope of payroll services that a business activity statement (BAS) agent can provide, and identify need for independent expert advice

Unit 2

1.2 Apply knowledge of legislation in relation to National Employment Standards, and legislative requirements in regard to payroll payments

Unit 2

1.3 Research and identify relevant to relevant state and modern awards, and employee agreements, regarding details to be set up in payroll system for individual employees

Unit 2

2 Record payroll data

2.1 Configure payroll system with complete data provided by employee and employer

Units 3, 4, 7 & 10

2.2 Review payroll data and clarify discrepancies with designated persons

Units 4, 7 & 10

2.3 Enter employee pay period details in payroll system in line with source data

Units 4, 7, 8 & 10

3 Prepare and process payroll

3.1 Conduct payroll preparation within designated timeframes and according to organisational policies and procedures

Units 4, 7, 8 & 10

3.2 Use employee source data to calculate, record and reconcile payroll according to legislative requirements

Units 2, 4, 7-10

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Appendix A - FNSTPB402 Elements of Competency and Performance Criteria


3.3 Reconcile total payments for pay period and review and correct irregularities or refer them to designated persons for resolution

Units 4, 5, 7, 8 & 10

3.4 Obtain authorisation of payroll and make arrangements for individuals’ payments in line with organisational requirements

Units 4, 7, 8 & 10

3.5 Distribute individual pay advice according to organisational and legislative requirements

Units 4, 5, 7, 8 & 10

3.6 Identify legislative and organisational requirements relevant to employment termination processes and payment, and seek advice to interpret requirements as required

Unit 2, 10

3.7 Produce, review and store payroll according to organisational policy and security procedures

Units 1, 4, 7, 8 & 10

4 Handle payroll enquiries

4.1 Respond to payroll enquiries according to organisational and legislative requirements.

Units 4, 7 & 10

4.2 Provide information provided according to organisational and legislative requirements.

Units 4, 7 & 10

4.3 Refer enquiries outside area of responsibility or knowledge to designated persons for resolution.

Units 4, 7 & 10

4.4 Provide additional information or follow-up action within designated timelines and according to organisational policy and procedures.

Units 4, 7 & 10

5 Maintain payroll

5.1 Maintain information and record keeping relating to payroll function according to current legislation and regulatory requirements.

Units 2 & 10

5.2 Prepare and reconcile month-end and year-end payroll records to ensure compliance with legislative and management deadlines.

Units 5, 6 & 10

5.3 Update records and systems in line with salary reviews and other changes in employment status.

Unit 3, 7 & 10

5.4 Establish back-up and disaster recovery systems. Units 1 & 10

5.5 Generate and distribute payroll reports in line with organisational policy.

All units

5.6 Extract and apply BAS and instalment activity statement (IAS) data according to legislation and regulatory requirements.

Units 5 & 10

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